Smash repairs roll-up Collision Services courts funds for IPO News27 May 2019

Eleven smash repairs businesses are set to combine under the Collision Services Industries banner, as part of a $120 million-odd sharemarket float being pitch to fund managers.

 

Brokers Evans Dixon, Shaw and Partners and Ord Minnett are in the market seeking to raise $73.5 million for the company's initial public offering which, if successful, would value the company at $110 million to $120 million according to details in front of fund managers.

 

The brokers are booking fundies for meetings with Collision Services Industries (CSI) management to take place in the coming fortnight, starting with a lunch in Sydney on Tuesday.

 

CSI wants to come to market as the owner of 11 smash repairs businesses with 23 operating sites across the eastern seaboard.

 

It is a smash repairs roll-up overseen by CEO Darrel Maloney and Strategic Equity Alliance - the firm behind National Veterinary Care and Greencross, among others - and is making a high growth pitch to potential investors.

The first leg of its pitch is consolidating the fragmented smash repairs market via further M&A, while the second is organic growth driven by expansion of services, scale driven procurement opportunities and centralised support.

The business comes to market with contracts underpinned by insurer Insurance Australia Group and others, with 80 per cent of insurer revenue "exclusive and preferred", according to details in front of potential investors.

The biggest business in the roll-up is NSW-based CRA, which has 82 employees and repaired 11,387 vehicles last year.

 

Funds raised at the IPO would be used to pay cash consideration as part of the underlying acquisition agreements, provide working capital, repay convertible notes and costs of the offer.

The business expects $130.2 million revenue in the 2019 financial year and $15 million EBITDA.

 

The company's management are booked to spend the next fortnight in front of fund managers, while its brokers will seek to raise the IPO funds at a bookbuild in the second week of June.

 

Source: AFR 27 May 2019 https://www.afr.com/business/transport/smash-repairs-roll-up-collision-services-courts-funds-for-ipo-20190527-p51rgr

 

 

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